San Diego Multifamily Report – June 2024
The city's sluggish pipeline has proved to be a short-term advantage.
After five months of contractions, San Diego’s advertised asking rents returned to positive territory, improving 0.2 percent on a trailing three-month basis through April, but slightly lagging the nation’s 0.3 percent. Year-over-year growth clocked in at 0.4 percent, to $2,705, behind the 0.7 percent U.S. rate. In line with national trends, occupancy for stabilized assets dropped 80 basis points, to 96.1 percent as of March, but remained above the nation’s 94.5 percent.
The Southern California metro’s economy is showing some signs of improvement, but progress is modest. Unemployment improved 40 basis points since February, to 4.4 percent as of March, according to preliminary data from the Bureau of Labor Statistics. This was higher than the 3.8 percent national rate, but below California’s 5.3 percent figure. Job expansion over the 12 months ending in February stood at 0.9 percent, amounting to a net gain of 13,600 positions. Education and health services led growth, with 15,000 jobs gained (up 6.3 percent). A few sectors recorded losses, including professional and business services (-8,900) and manufacturing (-3,200).
Multifamily development remained sluggish at best, with only 126 units coming online during the first four months of the year. During this period, construction began on a single 192-unit property, indicating that developers are prepared to wait for more favorable conditions. Investment paints a similar picture, as only $198 million in deals closed through April.
